A property tax case in outstate Michigan could be good news for nonprofits challenging property tax assessments in other parts of the state.

Municipalities around the state are dropping property tax assessments against Baruch Senior Ministries, following a recent Michigan Supreme Court case that validated its charitable nonprofit status.

The case is expected to serve as a precedent for nonprofits that are typically exempt from property taxes but have been getting bills from Michigan cities and townships looking to fill revenue gaps.

Following a six-and-a-half-year legal challenge, Tittabawassee Township late last month dropped its assessment against Baruch, a faith-based nonprofit that operates 23 assisted-living, independent-living and memory-care facilities for seniors across the state.

The township conceded that Baruch is entitled to a property tax exemption as a qualified nonprofit, said Terry Zabel, an attorney with Rhoades McKee P.C. in Grand Rapids, representing Baruch in the property tax litigation.

Several of the other 14 Tax Tribunal cases concerning Baruch's properties have been resolved by local tax authorities as well, he said in an email. And other cases are in the process of being resolved.

None of the other Baruch cases have been scheduled for a re-hearing with the tax tribunal and may not need to be, Zabel said.

Municipalities around the state have been relying on six factors laid out in an earlier Supreme Court case to qualify a nonprofit as charitable. But on several occasions, they have interpreted the fees some nonprofits charge and qualifications they place on who can benefit from their charity as "discriminatory," the high court said in a June 28 opinion.

But none of the factors laid out in the original 2006 case, Wexford Medical Group v. City of Cadillac were designed to require a charity to offer services for free or to select recipients using arbitrary criteria such as first-come, first-served, according to the court.

Any reasonable restriction to further a charitable goal that meets the permissible charitable purposes laid out in the original Wexford decision is acceptable and qualifies a nonprofit as charitable, the court said.

Nonprofits facing property tax assessments in Michigan should analyze whether their property may be entitled to tax exemption by utilizing the new test set forth in the Baruch case, Zabel said.